Among the major commodities, gold has performed among the best this year. It has risen over 35% so far this year, setting several new milestones in the process.
What has boosted its performance?
It is the strong central bank purchases, the strong Asian purchases, and rate-cut bullishness that have helped to boost it. This year has also been bolstered by safe-haven demand in the middle of elevated global concerns and uncertainties ahead of the US election.
I tend to think that the short- to medium-term upward trend in gold will continue. I think that gold will likely benefit from a favorable macroenvironment and the external conditions that exist in the economy as a whole (like GDP, inflation, employment, spending, and monetary and fiscal policy), as interest rates drop in the face of international unrest.
Regardless of the outcome of next week's presidential election, these factors are probably going to persist. But, at least in the short to medium term, they might be intensified with Trump in the White House.
Longer term, the Federal Reserve's ability to lower interest rates will be constrained by Trump's proposed policies, which include tariffs and more stringent immigration laws that are inflationary in nature.
There may eventually be some obstacles for gold due to a stronger USD and stricter monetary policy. On the other hand, more trade friction might make gold a more desirable safe haven.
Reference
1https://www.reuters.com/markets/commodities/gold-marches-record-us-election-jitters-fuel-safe-haven-rush-2024-10-30/
https://www.snopes.com/news/2024/09/19/trump-tariffs-explainer/
https://www.investopedia.com/ask/answers/020915/has-gold-been-good-investment-over-long-term.asp
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